RBI's 3-month moratorium on loans: What does it mean for you?


On Friday, the Reserve Bank of India (RBI) permitted all commercial banks and lending institutions to allow a three-month moratorium on term loans because the country had announced a 21-day lockdown to check the spread of coronavirus.

In this context, Onmanorama answers some of the basic questions of the customers.

Q: Which are the loans covered under moratorium?

RBI said that the moratorium applies to term loans. So it is applicable to all loans that have a fixed tenure. This means home loans, auto loans, personal loans, education loans and consumer durable loans such as EMIs on mobile phones, refrigerators and washing machines.

Q: Will all banks implement moratorium?

The RBI has just given approval for the banks to implement a moratorium. We still need to get clarity on whether banks will have to approve the suspension of EMIs.

Q: Which banks can offer moratorium?

All commercial banks, co-operative banks, all-India financial institutions and NBFCs (housing finance companies and micro-finance institutions).

Q: What did State Bank of India chief say?

SBI chief Rajnish Kumar said, after the RBI announcement, that all EMIs on term loans stand cancelled.

Q: If individual banks have to make a decision, how will they go about it?

In that case, banks have to get approval from their respective boards.

Q: When will the moratorium come into effect?

The moratorium will be applicable to all loans outstanding as on March 1, 2020.

Q: How will this affect my repayment?

According to RBI, the repayment schedule and all due dates may be shifted across the board by three months.

Q: Will non-payment impact customers' credit score?

No, it will not impact their credit score.

Q: Will the moratorium be applicable to both principal and interest?

Yes, this is applicable to both principal and interest, for three months.